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Q&A » Buying and selling property
I feel a bit stupid asking this question, but we bought our first house 20 years ago and are now planning on moving area. We have sold for £163K and plan to buy around £200K. If we need to put a 10% deposit down on exchange, do we need the ready cash or is it funded from the mortgage advance? We are currently mortgage free and will be taking out a £40K mortgate.
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804The 10% deposit normally passes along the chain, so your solicitors get £16,300 and you would normally put in the other £3,700 so that your solicitor can pass on £20,000.
As you are not putting any cash into the whole process, the mortgage will need to be in 2 stages, £3,700 & £36,300.
It would be better to mention this to your conveyancer.
Mike
Posted on 15 July 2010 |
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134You can top up, as Mike says.
Very often however, if there isn't a huge disparity in price, the sellers will accept less than 10% deposit to avoid the "topping up"
e.g S sells to you for 200,000
You sell to FTB for 163,000
If FTB has full 10% deposit (16,300), S may well accept that figure in their contract (although it is less than 10%). Obviously the amount you pay on completion is increased to compensate. Your solicitor will ask the seller's sol to confirm they will accept a reduced deposit.
Posted on 15 July 2010 |
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0Thanks so much to both of you, looks like I have a couple of options and the most I will need to fund will be the £3,700, which I can do with part of the new mortgage. That's a relief! The only problem now is that my buyer is having 2nd thoughts.
I appreciate your help though,
jaglover
Posted on 18 July 2010 | Love 0 loves
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